Cable Cars a Popular Tourist Draw But How Should We Pay for Them?

2939953478_22a244aaa0.jpgFlickr photo: laverrue

Cable cars are icons of San Francisco, a draw of tourist dollars far beyond their fare revenue, and living pieces of San Francisco history and transit. They’re also protected in the city’s charter, just like the Transit First policy, though perhaps with greater force. Like the Golden Gate Bridge, cable cars bring visitors to the city, where they spend their money at hotels, restaurants, museums, bars, and other attractions. But while their overall economic value to the city undoubtedly exceeds their operating cost to Muni, their fare revenue does not. And unlike the Golden Gate Bridge, cable cars do not ultimately provide a vital transportation link for residents and commuters.

Angela Jackson, a spokesperson for the San Francisco Convention and Visitors Bureau, wouldn’t put an exact dollar figure on cable cars’ value to local tourism, an industry that brought in about $8.5 billion to San Francisco last year. But they’re certainly one of the top draws, she said. "The cable cars for San Francisco are invaluable as far as tourism goes. Cable cars are one of the must-experience attractions for everyone who comes to San Francisco."

"I used to work for one of the hotels that was on one of the cable car lines, and we would get calls once a week from some production company wanting to stage photo shoots because it stopped in front of our hotel. I don’t think there’s anything that depicts San Francisco, whether it be a feature article in a magazine or in a newspaper, or a travel series that does not include the cable car."

Cable cars are routinely packed, in spite of frequent service and a five-dollar one-way fare for those without a Fast Pass. As a result, cable cars recover roughly half their operating cost through fare revenue, about $24 million in fiscal year 2008, an impressive feat given that they are by far the most expensive mode to operate in the Muni system. In fiscal year 2008, that still left $27 million that the MTA had to subsidize from its general operating funds, a significant sum considering Muni’s $129 million deficit this year. Getting rid of cable cars would be killing the golden goose, not to mention a historical atrocity and a violation of the city charter, but could there be a source of funding that more directly harnesses cable cars’ contribution to citywide tourism revenue?

Quite possibly, explained Livable City’s Tom Radulovich. "There’s two loopholes in the city’s parking tax. For a long time, hotel parking was paying neither the parking tax nor the hotel tax. So I think now [the city is] saying pay one or the other. The parking tax rate is higher, so if we taxed [all] hotel parking at the higher rate then that would raise more money. So, you’d in essence say, ‘Okay, we’re going to use hotel parking to subsidize transit for visitors.’ That seems reasonable, and it’s not adding to the basic hotel tax."

The second option, said Radulovich, is to close the loophole for
valet parking. "Valet parking doesn’t pay anything," he said.
Closing that loophole and "dedicating it to visitor transit might make
sense as well."

3529769546_eb3a44c388.jpgInside the cable car barn. Flickr photo: 4PIZON

Jackson said the San Francisco Convention and Visitors Bureau certainly is not proposing an additional tax or assessment, but Radulovich said the parking taxes might have a chance at gaining business support if they directly enhance tourism, and don’t add to the base hotel tax.

A tourism-based revenue source might also free the city to start paying more attention to properly planning transit that services tourists, and locals. Many transit advocates are hesitant to fund tourist transit when transit for locals is woefully under-funded. Still, tourist transit serves an important function in the city, with benefits to locals, like reduced traffic congestion, so finding a source of funding that doesn’t compete with local transit funding could pay serious dividends.

"I think as a city, we ought to say, ‘Come to San Francisco, leave your car. You can get around to all the tourist destinations and have fun doing it without a car,’" said Radulovich. "For years I’ve thought it would be smart to spend some portion of the hotel tax on visitor-related transit. Cable cars, F-line, even doing a fare-free downtown like Portland and Seattle do, that could make a lot of sense for us in terms of making it really visitor friendly but also making the system work better for locals and cutting down tourism-related traffic."

Kristen Holland, a spokesperson for the MTA, notes that some of the cable cars’ 24,000 daily riders are locals. "I know a lot of operators say they have people with Fast Passes on all the time," said Holland. "They have sort of a dual purpose."

Because the cable cars are so crowded, most riders do seem to be visitors, but lines that are popular with tourists tend to attract locals as well, as the F-line historic streetcar also demonstrates (the recently defunct Culture Bus shows the pitfalls of a strictly-tourist line.) Finding a tourism-based source of funding for lines heavily used by tourists could ultimately help increase service on lines that are used by locals too. Of course, MTA Board Director Malcolm Heinicke has also suggested introducing tasteful advertisements on cable cars, without much further discussion so far. The additional funding would certainly help, though advertising on historic structures is always contentious.

While Gavin Newsom has created a "Green Rental Car Incentive," it may be time for the city to adopt a truly green tourist transportation policy that encourages transit use, and funds it more directly through tourist dollars. The result could be a much better system for tourists and locals alike.

  • How about a different fare for the F Market streetcars, maybe priced at $3 (higher than buses, lower than cable cars) with unlimited rides with a Fast Pass? I know it’s a popular line for locals as well as tourists, but it essentially duplicates a lot of other Muni services.

  • You’re telling me with cars that are packed night and day, and $5 fares for most riders, cable cars don’t run a profit? That seems really, really surprising…

  • mcas

    I commuted with a Fastpass on Cable Car to Powell BART 5 days a week for an entire year (June 2006-2007). There were *maybe* 5-10 other folks who I would see heading towards Union Square in the morning also commuting. There were so few of us, that most of the cable car operators knew us as commuters and would only check our pass at the beginning of the month.

    While it was most convenient for me (John Street) and poetic to move to SF and use the Cable Cars to commute– there are very very few folks in the city who that works out for. I’m going to call BS on Kristen’s claim– I’m sure MTA could easily get the data rather than allowing a spokesperson to just make anecdotal claims if they wanted to…

  • Peter Smith

    i’d like to see the cable cars run as an actual transit service for locals. the tourists will be happy to ride them still.

    even for the tourists, tho, the hours-long lines and service once-every-other-hour or whatever it is — it’s just a disaster. why have tourists standing in line all day instead of being out and about, enjoying the city, spending money, etc.?

  • ZA

    Cable car fares meet 50% of system cost?! Amazing!

    @Evan – I know of no mass transit system in the world that achieves revenue-neutral, let alone turns a profit, that actually serves people, for longer than a few months, on fares alone.

    As a general rule, this is because mass transit systems account for more costs than most other alternatives, and they are capital-intensive with long payback periods (take your pick: bonds, property taxes, federal-state-local revenue exchanges, etc.).

    I don’t think we should expect MUNI to be 100% self-sustaining, let alone on fares alone. Fares probably should at least equal the cost of collection (and those need to be simplified) though.

    Linking hotels and tourism revenue to the cable cars and F-line makes sense, but don’t expect to retain much voice for long on how these should be run if you turn to dominant corporate sponsorship.

    Also consider for how much longer the F-Line will be needed in its current form, 10 years? 15? The eventual Central Subway may take up a lot of this tourist travel between the hot spots of recreation, hotels, shopping, conferences, and rail hubs.

  • This is complete non-sense for you to suggest to cut cable car in order to balance MUNI’s budget. Cable cars recover roughly half their operating cost through fare revenue. What about those bus line that does worst? But about the lines that bleed 90% of their operating cost? Anyone in their right mind will cut those inefficient lines instead of cable car! What stop them from being cut? Because a few whiners will complaint they can’t live without them. Newspaper will interview them for a story of how miserable life will become for them. Lo and behold we will continue to run those bus so as not to upset them. So in San Francisco we value the voice of a few whiners more than our tourism industry.

    I know what we need to do to shut up this non-sense. Find a few whiner to complain. Interview a 80 years old in front of a steep slope and have them say “how am I going to get home if you cut the cable car?” This should be enough to stop this non-sense.

  • SFResident

    @Wai Yup Tung – We live in a city that happens to be a tourist destination. We don’t live in a tourist destination that happens to be a city.

    Cable cars are fantastic and their service should be expanded if at all possible. That being said, this post is spot on. Cable cars really should be funded through a different stream than the regular MTA budget. With the possible exception of the California Street line, these aren’t really used for moving people, residents or tourists, around the city – they’re destinations in and of themselves.

  • mcas

    @Wai Yip Tung: You can keep saying that… until they threaten to cut your line. Necessity, not revenue should be driving any public investment. Public Transit is a public good, not a for-profit company and shouldn’t be treated as such. The costs of investing in quality, free public transit is far lower than the cost of trying to figure out how to get the day-time population of 1,000,000+ people around this city without it.

  • patrick

    Who actually is saying to cut cable car service? I didn’t get that at all from the post, and I didn’t see any commenter suggest it, but maybe I missed it.

    Anyway, It seems the 1 way fares could easily be increased, if you see the lines at powell there is plenty of demand. Keep it free for fast passes. Locals can ride it at the same amount and tourists are used to getting gouged, it’s probably one of the cheaper attractions in this city, even if the cost is raised.

    I’m all for parking tax for hotel parking. I’d like to see them get some of that money back by being able to offer guests free or highly discounted daily/weekly MUNI passes. That way there will be more demand for MUNI & more revenue.

  • Cable cars is a challenging mode of transit to operate. Operationally, there is little you can do to make them more efficient: they will always run at 9.5 mph, they require two skilled unionized brakemen to operate, have a small passenger capacity per vehicle, and stop at every block. Since fare is paid by cash personally handled by one of the operators, you want to charge fares in even denominations ($5, $10) so operators won’t have to make change.

    I am doubtful of Radulovich’s assertion that a tax on hotel parking spaces would be anything more than a drop in the bucket to close the deficit. If there were 1000 hotel parking spaces in the city, and 300 days per year they were occupied, the city would have to charge $80/day in tax to completely fund the cable cars.

    The cable car should be charged $10 fare for the following reasons: It’s a ride, not accessible, EJ-compliant transit. There are so many constraints put on it that you can hardly qualify it as a transit service. The price point is too low. Lines are long, tourists want the experience, why aren’t we charging more? $10 is very affordable for a tourist. That will barely buy you a sundae at Ghirardeli’s. Finally, the best way to pay for a service is to charge the users directly. It sends the correct market signal to the end user.

  • When I go to other world cities there is always a fairly expensive week pass or two day pass that you can get to ride all the transit in the city. Why can’t we do something like that sold through hotels or at kiosks? That might raise some more money instead of making tourists pay change at each place including at the Cable Car hop spot. What about a $25 two day pass that gives you rides anywhere you want to go?

    I also like the idea of closing the loopholes. It might not cover all the deficit, but individual sources never do, it’s more like a pie approach, piece by piece to get what you need.

  • AW

    Has anyone taken notice that BART Director Radulovich is spending his time and energy on cable car operations with a 50% farebox recovery ratio, instead of BART operations which has a 45% farebox recovery ratio? Or if he MUST focus on San Francisco, then focus on MUNI as a whole, not the cable cars, which has a 27% farebox recovery ratio

    ZA – Hong Kong, Taipei, Tokyo Metro, and Osaka all have farebox recovery ratios higher than 100%.

  • AW give me a break. People can focus on a number of different subjects at once you know. And just because one article is written about the cable cars, does that mean someone is focusing completely on it? Probably not. The fact of the matter is that Tom has lots of hats and is quite knowledgeable about all these things. Though I wish that Streetsblog would come up with more sources than just Tom (seems like he pops up everywhere on transit articles), he’s ultimately a go to guy.

  • Where do you get this idea that cable is not for local resident? By my estimation, at least 15% of the rider are locals. Look at the ridership data from sftep

    http://www.sfmta.com/cms/rtep/Route60data.htm

    For the Powell–Mason line about 68% out of the 5,105 daily rider board from the terminal at Hyde and Beach. For those who board at the start or the first half of the route, I’ll call them tourists. For those who board after half way, I call them local. Tourist who pay $5 for a fun ride won’t be satisfied with just half of the ride, will they? Give or take a little from each half should should give an estimation. It says there are 15% or 775 local rider. Times two will be 1650 daily riders. Not a shabby number at all. In comparison 56 Rutland has 218 daily riders.

    Think about it, if you have Fast Pass, there is no reason why cable car can’t be used for local transportation. It is frequent. It goes through dense neighborhood. And it goes over steep hills. Just because it is popular with tourist doesn’t mean it is not useful for locals.

  • @mcas, yes they are going to cut my line. No big deal. It is only going to be a 1/2 mile walk hill for me. I can handle it. A lot of times I am the only one who take the bus for this stretch anyway. The rerouting definitely make sense.

  • SFResident

    @Wai

    Who are you arguing with? We’re mostly big cable-car proponents here. This is just a post about creating proper revenue streams for the operation of this particular MTA line. Why should an MTA line with (by your estimations) an 85% “destinationless” ridership be funded by an agency tasked with moving people around the city in an efficient and cost-effective manner? Shouldn’t it be funded by an agency tasked with promoting San Francisco tourism or maintaining San Francisco’s historical and cultural resources?

  • Overhead Wire: I thought I heard that they were discontinued last year, but according to their web site, Muni does have 1-, 3-, and 7-day passes. http://www.sfmta.com/cms/mfares/passports.htm

  • Wai’s also hit on another issue: because there’s no transfers on the Cable Cars, tourists ride them all the way from end to end to “get their money’s worth” instead of hopping off along the way. That’s lost business for Chinatown and North Beach and creates long waits at the turntables where tourists, vehicles and operators all get bunched up and do no one any good.

    Instituting a 90-minute transfer policy like the rest of the Muni system would go at least some way towards distributing the load more evenly along the line. The operational improvement might not equal the lost revenue, but that’s not the point: it would reduce the time tourist spend waiting in line increasing their enjoyment and the time they can be spending their money elsewhere in the city.

    Cable Cars are a loss leader for the City, no different than a store puts one item on sale in order to bring in customers that will buy other more profitable items, or a company sells one product at or below cost in order to make money off the accessories.

  • How about creating another cable car line or expanding one of the cable car lines we already have?

  • ZA

    @ Whole Wheat Toast

    Given the opportunity to create a whole new cable car line, there are relatively few circumstances where an electric drive couldn’t do the job better and less expensively.

    That said, the cable car does a very good job of mixing both linear travel and hill climbing.

    For hypothetical new/restored cable car lines where money and politics are no object, I nominate:

    1. All of 24th Street from Potrero (or possibly beyond it to Bayview) to Twin Peaks.
    2. Castro St from at least Waller, south to Diamond, perhaps all the way to Glen Park BART.

    I wouldn’t bother with wood and attempts to look ‘historical’ … I’d make maximum use of modern materials technology for a light-weight homage to the original.

    Of course, a BRT and rail tunnel along all of Geary would make a lot more sense, $ for $. We should never have lost the electric streetcars that ran out to Land’s End and Sutro Baths.

  • ZA

    To all:

    FYI – Know your transit history: http://www.foundsf.org/index.php?title=Streetcar_lines_1934

  • david vartanoff

    In return for taxing hotel/valet parking, there should be one day Muni passports for all hotel guests first night stay. Encourage them to get on/get off all over. The cable cars are indeed a ‘draw’/loss leader bringing tourists to SF. The lines BTW would be shorter if the cars an to schedule.
    As to higher fares on the F NO! It is real local transit which tourists also happen to use.

  • Yeah, I’m not sure about one to the Bayview, but personally I like the idea of having the Castro Cable Car line. The question is how to connect it with the current cable car system, maybe via Pacific Heights…

  • Up 17th to Twin Peaks from the Castro could be useful too.

  • Boris

    As far as expansions go, I’ve always thought that it would be nice to extend the California line to Japantown (on California, turn left onto Buchanan) or to Fillmore St. Make it a line that’s more useful to tourists (and help out the merchants in one of those areas).

  • Ian Fryer

    The solution seems simple to me (but I am just a Brit!). Just put the one way cash fare up to $10 and recover the small remaining deficit between cost and profit from hotel parking taxes. Allow the smaller proportion of MUNI card holding locals to continue as is.
    Simples!

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